May 15 is National Senior Fraud Awareness Day, and while it is crucial to have a date to call attention to the nefarious actors that target the elderly, it is even more critical to make sure your institution is catching all forms of fraud that affect your customers or members, no matter their age. Your fraud detection software needs to use single- and multi-channel fraud detection to ensure certain types of fraud are not going undetected, costing your institution and customers/members hundreds of thousands, if not millions, of dollars.
Single-channel fraud detection looks at and alerts to fraud using only one channel – usually funds leaving the institution. Multi-channel fraud detection relies on money coming into the institution and then going back out. Some transaction monitoring systems only track for multi-channel fraud, meaning you can be overlooking a substantial number in fraud losses. BAM+ Fraud Scenarios utilizes both single- and multi-channel fraud detection to ensure you are better protecting your customers/members and your institution’s reputation.
Here are some current fraud scams targeting the elderly and how your single- and multi-channel fraud detection should work to catch them:
Credit Card Fraud – Suddenly, an elderly customer has an ACH transaction for $2,400 at a big-box electronics store. Her largest ACH transaction over the past six months is just $600. Single-channel fraud detection looks back and evaluates transactional patterns against historical patterns. This transaction is 4 times her normal transaction volume and should raise an immediate red flag in your transaction monitoring software if it uses single-channel fraud detection.
The Romance Scam – An elderly man comes into your institution and asks to wire money to his fiancée in Canada. He sends a wire for $75,000 to his sweetheart but, in reality, it goes straight to the account of fraudsters and this man has depleted his entire life savings with no way of getting it back. BAM+ would alert you to this fraud with the outgoing wire fraud scenario, making sure you stop this wire from leaving your institution.
Elder Financial Abuse – An older member starts transferring $1,200 monthly to her caretaker’s account at another financial institution. Historically, this member has never had a reoccurring transfer and never transferred more than $500 at a time. With single-channel fraud detection, your transaction monitoring software should look at historical patterns and alert you to this potentially fraudulent behavior.
The Grandparent Scam – A grandmother gets a panicked call from her “grandson” saying he got a DUI and needs $20,000 for bail. Grandma goes into your institution, transfers money from her savings to another account (her “grandson’s”) and that money is quickly wired out of the institution. She is thinking she is saving her dear grandson, but instead, she has lost her retirement. Using multi-channel fraud detection, your fraud scenarios should pick up on this attempt at stealing grandma’s money and protect her savings.
Sweepstakes or Lottery Scam – “Congratulations! You’ve just won the Price is Wrong!” A customer comes in with a check for $30,000 and asks to wire $5,000 out so he can claim the rest of his (fraudulent) “winnings.” Unfortunately, by the time this customer learns the check he deposited is fraudulent, he is out $5,000. This could be prevented by a fraud system that uses multi-channel fraud detection to alert the institution to this potentially fraudulent behavior.
Relying only on multi-channel fraud detection would mean you would miss three out of five of these fraud scams. Your institution cannot afford to rely on a fraud solution that does not utilize single- and multi-channel fraud detection. By relying only on a transaction monitoring system that uses only one form of fraud detection, your institution can be overlooking millions of dollars in fraudulent transactions, putting your customers/members and the institution itself at risk.